Critical illness
What would life be like if you were diagnosed with a serious illness?
Things could change very suddenly. You’d get your family together and tell them what was going on. Before long, you’d start spending time in hospital for treatment. You may also need to take some time off. It’s hard to know what the financial impact of all this would be for you and the people who depend on you. Any of us can become ill at any age – and with appropriate critical illness cover in place, it could help to give some financial security at a difficult time.
Critical illness cover can help to minimise the financial impact on you and your loved ones. For example, if you needed to give up work to recover, or if you passed away during the length of the policy, the money could be used to help fund the mortgage or rent, everyday bills, or even simple things like the weekly food shop – giving you and/or your family some peace of mind when you need it most. Tax-free lump sum Critical illness cover, either on its own or as part of a life insurance policy, is designed to pay you a tax-free lump sum on the diagnosis of certain specified life-threatening or debilitating (but not necessarily fatal) conditions, such as a heart attack, stroke, certain types/stages of cancer and multiple sclerosis.
A more comprehensive policy will cover many more serious conditions, including loss of sight, permanent loss of hearing, and a total and permanent disability that stops you from working. Some policies also provide cover against the loss of limbs. But not all conditions are necessarily covered, which is why you should always obtain professional financial advice.
Exclusions and limitations: The illnesses covered are specified in the policy along with any exclusions and limitations, which may differ between insurers. Critical illness policies usually only pay out once, so they are not a replacement for income. Some policies offer combined life and critical illness cover. These pay out if you are diagnosed with a critical illness, or you die – whichever happens first.
Pre-existing conditions: If you already have an existing critical illness policy, you might find that by replacing a policy, you would lose some of the benefits if you have developed any illnesses since you took out the first policy. It is important to seek professional advice before considering replacing or switching your policy, as pre-existing conditions may not be covered under a new policy.